Volvo launches Lower-Priced Models in India

By Nikhil Gulati

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Volvo XC60

NEW DELHI – The India unit of Volvo Cars Corp. Wednesday introduced three cheaper variants of its vehicles, powered by smaller engines, as it attempts to grow in a market where it hopes to sell 20,000 vehicles a year by 2020.

Volvo Auto India Pvt. Ltd. introduced 2.0-liter diesel-engine-powered variants of its S60 and S80 sedans and its XC60 sport-utility vehicle. The base variant of the S60 has been priced at 2.32 million rupees ($47,025), while the S80 is 3.12 million rupees and XC60 is 3.32 million rupees at showrooms in New Delhi.

The three new variants are 600,000 rupees cheaper than the comparative models, which are sold with a 2.4-liter diesel engine, the company said. Volvo also sells the sedans and SUV with gasoline engines.

The auto maker has lagged behind BMW AG, Audi AG and Daimler AG in India’s luxury car market, which is expected to become one of the world’s largest in the next decade. Volvo doesn’t produce cars in India, making its models more expensive due to taxes on imports.

The company said it will introduce newer models to increase its share in India and that it aims to be one of the top three luxury car makers in the country by 2020.

“[The] luxury car segment is growing at a good pace in India but it is still very small. The segment comprises 1% of total car sales in India compared to 10% globally, and we expect it to grow to 3% by 2020,” Tomas Ernberg, managing director of Volvo Auto India, told reporters.

He said the company wants to sell 800 cars in India in 2012, up from 320 it sold last year.

“With new models and marketing push, we expect our sales to grow to 20,000 by 2020. We expect to have a 15% market share of India’s luxury car market by then,” Mr. Ernberg said.

Volvo Cars is owned by Chinese auto maker Zhejiang Geely Holding Group Co., which bought it from Ford Motor Co. in 2010.